I was thinking about how to create the best possible pie strategy.
Scenario 1 - Create separate pies for ETFs, REITs, dividend stocks, etc.
Downside: all dividends within the pies stay within the specific pie.
Scenario 2 - Create one pie for ETFs, REITs, dividend stocks, etc.
Downside: going to be a chaos the more instruments you add.
Scenario 3 - Create pies based on region (Europe, North-America, Asia) or sector (Financials, tech, industrial, energy, etc)
Downside: one pie could perform much better or worse than others. what to do then?
Thoughts? Maybe you have another scenario. Please add them below!
I’m Scenario 2 until pies within pies. Would rather keep it all together
healthy blend of the 3 when you can stack pies. I have currently set up a pie but am waiting for it to purchase the first round of holdings…
What I miss is the ability to move instruments from outside into a pie or vice versa. Or move instruments from one pie to another. However that would make the weight assigned to instruments more complex, because you need to rebalance after each move.
That would be scenario 1 within scenario 2. Only difference is you don’t have pie-less instruments in your main pie.
What I did so far for pies:
1 - Passive Income - All stocks (or ETFs) with dividends above 3% or well know very good dividend payers just slightly above 3%, where the compounding is very desired.
2 - Defensive - All stocks (or ETFs) with lower dividend yields, very low volatility and good stable growth. (ADP, WM etc)
3 - Growth - Growth potential (and growth history) is the key, if pays dividends, ok, but it’s not mandatory. (MSFT, AMD, NEE etc)
I basically split the pies by how important is the dividends reinvestment combined with dollar cost average.
I’m still awaiting for my assess, but I’m hoping to have pies for sectors.
So they act like ETF’s
Oil and mining stocks
Cannabis, crops and some pharmaceutical stocks
Large stocks: Tesla, Uber, Alibabba Google
Banks: Us and Uk
Payless: visa, master card, pay pal, square etc.m
I also plan to be very cautious on rebalancing as it can create your weaker stocks to be supported for simply being a poor stock and your strong stocks being held back from performing great returns.;
I agree with this. I do not intend to rebalance, if I was to rebalance I would probably rebalance specific stocks manually.
I have a question, not about the pie itself but regarding the strategy. My strategy is focused toward dividends investing and I think the auto invest feature is amazing for that. But I was wondering, is cost averaging an entire pie by investing every month worth it?
I know that regular investment is essential to expect return, but isn’t it better to invest the same amount of money every month but in good opportunities (eg look at the p/e ratios of the companies in my pie each month) rather than in the whole pie where some companies might be overvalued?
What I’m afraid is that by investing the same amount in the same pie every month, the average cost of a company in my pie would be close to its current price and therefore there would be no growth/gain after a long period of time.
I don’t know if my question makes sense, I’m not native English, but I would really appreciate your view on that many thanks guys
If you are dividend investing, then you purely focus on buying dividend stocks with growth in their dividends. That is what I learned when I read about it. Cost averaging isn’t that important.
I want to add my currently owned positions to my pie, so personally I wouldn’t mind being able to add them and then rebalance when they are inside the pie👍🏻 I just hope this is a feature they incorporate soon because I can use it how I intended in terms of setting investment goals… it currently looks like I’m 0% towards my goal because I can’t add my current positions to it. I’m sure they will add this though as it makes sense to transfer stocks between pies as people change up their strategy
I like this question as I have asked myself this before. my portfolio is currently 95% ETF’s and 5% individual stocks, my etfs have proven track records of healthy returns so I don’t mind cost averaging in them as I’m looking at holding them for 40 years. As a result, I don’t mind cost averaging into my individual stocks because they are only for dividend income, and they represent such a small part of my portfolio that any gains/losses will not effect my overall returns so much.
So my advice is that if you’re purely investing in individual stocks, then be wise on when you buy, because there is such thing as paying too much. But if you’re like me and your investments are spread out, and it’s returns are based on the performance of the overall market, then cost averaging is a great option to consider.
Time in the market, beats timing the market if you’re invested in the right stocks👍🏻
can you paste the link to your pie ??
Tesla’s in performance and not risky
Why only MasterCard and no Visa?
They are the same for me… since most new hipsters banks tend to use MasterCard, so it’s a positive point
I only have visa cards (revolut, bank debit, bank credit) but I used to have a MasterCard (old bank credit card) and a maestro (old bank debit card)
Looks strong to me. Never heard of Zillow, Tattooed Chef, or InVitae however.
I’d consider thinking about the future of Slack however. Microsoft Teams is exploding and may steal their customers.
Also 55% of the pie is in the top 6 positions, with 20% in Tesla. For me, 20% in Tesla is a bit risky. I’d probably split the 55% evenly amongst these 6.
@obrienciaran Thank you for the feedback, really appreciate it and will take it on board.
Slack is an interesting one. I really like their software and think that it has great potential. Slack seems to have struggled during the pandemic as companies don’t seem to be investing in platforms such as Slack as much as they’ve invested in Zoom or Teams due to the immediate benefits. Good to see that Amazon have invested in Slack as one of their chosen platforms. Ark Invest have also invested heavily in them this week too, so I can see good things happening with Slack. Just my personal humble opinion and admit that I might be entirely wrong as I’m still new to investing!
I’ve created different kind of pies:
thematic pies: like Disruptive technology (high growth tech stocks), Emergency Fund (some bond etfs and safe utilities stocks with high dividends), dividend growth, value investing
sector specific pies that mimic the sector spider ETFs (like utilities, telecommunication, energy, financial, consumer staples, etc.)
this is my strategy now, to autoinvest of 4 of these pies (mostly thematic), and switch money between sector pies when the market condition are favorable to this scenario…
when financial sector is beaten down I will put money here, then wait for the tech stock to undervalue, and move money from financial to tech, etc…